A Breathless Tour of Blockchain

A fast paced review of blockchain technology, applications, architectural characteristics and programming, using Ethereum as the main example.

Presented at the JAX London 2017 conference.

Transcript

1. A Breathless Tour of Blockchain Eoin Woods Endava @eoinwoodz 1 licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
2. Agenda • What is Blockchain? • Applications for Blockchain • Blockchain as an Architectural Element • Programming the Blockchain • Summary 2
3. What is Blockchain? 3
4. What is Blockchain? • The enabling technology of Bitcoin • A distributed database without a controlling authority • An auditable database with provable lineage • A way to collaborate with principals without trust • Trust and storage mechanism for cryptocurrencies • Architectural component for Internet-scale systems? 4
5. What is Blockchain? Basic terms 5 Crypto Currencies Ether Distributed Ledger P2P distributed, append-only, transaction list Blockchain cryptographic validation, distributed consensus mechanism Smart Contracts code embedded in the blockchain, manipulates the blockchain state
6. What is Blockchain? Bitcoin network example Miners Bob Alice 6
7. What is Blockchain? Blockchain structure Transaction 1 Transaction 2 Transaction 3 Block Hash Prev Block Hash Transaction 4 Transaction 5 Transaction 6 Block Hash Prev Block Hash Transaction 7 Transaction 8 Transaction 9 Block Hash Prev Block Hash Transaction 10 • Public keys identify participants • Bitcoin addresses identify participants in a transaction (derived from PK) • Cryptographic hashes used to ensure integrity 7
8. What is Blockchain? Consensus Q. How do we know the information on the chain is correct? A. Because everyone agrees – this is “consensus” Blockchains use different types but “proof of work” is common • To create (“mine”) a block you need to solve a hard problem • If you don’t solve the problem then peers will reject your block • Thus forging the blockchain would require a huge amount of work to get your fraudulent blocks accepted (“impossible” without 51% of capacity) Other models including “proof of stake” and “proof of membership” 8
9. Applications for Blockchain 9
10. What blockchains exist? A lot of blockchain implementations exist. A small sample of them are: Bitcoin 2009 Cryptocurrency Litecoin 2011 Cryptocurrency Ripple 2012 Blockchain payment and settlement system Chain 2014 Enterprise blockchain Ethereum 2015 Blockchain dapp platform Hyperledger 2015 Linux Foundation open source blockchain projects R3 Corda 2016 Distributed ledger for the financial industry Multichain 2017 Enterprise blockchain 10
11. Cryptocurrencies – August 2017 10 cryptocurrencies market cap of > $1B Bitcoin is $70B. source: coinmarketcap.com 11
12. Cryptocurrencies – September 2017 11 cryptocurrencies market cap of > $1B Bitcoin is $62B. source: coinmarketcap.com 12
13. Sidenote: Cryptocurrency Volatility 13 source: coinmarketcap.com
14. What is Blockchain being Used For? Trade Settlement and FX Transactions digital ledger that tracks and protects valuable assets verifiable supply chains post-trade processing Keybase Identity management verified data Georgia government records supply chain efficiency 14
15. Properties of a Good Blockchain Application • Multiple separate parties want to cooperate • No central intermediary exists (or is wanted) • Relatively slow moving processes (allow latency) • Well-defined, bounded process • Predictable, simple data access required 15
16. Demo: Browse a blockchain blockchain.info Most public blockchains have a range of associated web based “explorers” • For Bitcoin we’ll use blockchain.info • For Ethereum we’ll use etherscan.io etherscan.io 16
17. Demo: Explore a blockchain • The WannaCry ransomware attackers have 3 bitcoin wallets: • 13AM4VW2dhxYgXeQepoHkHSQuy6NgaEb94 • 115p7UMMngoj1pMvkpHijcRdfJNXj6LrLn • 12t9YDPgwueZ9NyMgw519p7AA8isjr6SMw • We can use blockchain.info to find out how much they have collected in ransom so far and where they sent it • Note: if using the API it returns values in satoshis: there are 10-8 satoshis in a bitcoin, so multiply by 0.00000001 to get BTC 17
18. Blockchain as an Architectural Element 18
19. Characteristics of a Blockchain Ledger • Distributed, replicated “database” • Distribution via a p2p model (no master) • Consensus model used to ensure integrity • Append only “immutable” store • Highly fault tolerant • Eventually consistent 19
20. Adding Smart Contracts • Code stored in a blockchain, executed by the blockchain virtual machine • Programming models vary by platform • Bitcoin - primitive ”Forth” script • IBM Hyperledger – GoLang • Ethereum - Solidity • Ethereum Solidity is our example in this session 20
21. Example: Ethereum Solidity Smart Contract contract Coin { // The keyword "public" makes those variables readable from outside. address public minter; mapping (address => uint) public balances; // Events allow light clients to react on changes efficiently. event Sent(address from, address to, uint amount); // This is the constructor whose code is run only when the contract is created. function Coin() { minter = msg.sender; } function mint(address receiver, uint amount) { if (msg.sender != minter) return; balances[receiver] += amount; } function send(address receiver, uint amount) { if (balances[msg.sender] < amount) return; balances[msg.sender] -= amount; balances[receiver] += amount; Sent(msg.sender, receiver, amount); } } 21 // More details later …
22. Quality Properties of a Distributed Ledger Useful Qualities • Append only • Security (integrity, non- repudiation, availability) • High fault-tolerance • No single point control or trust • Embedded immutable logic • Dynamic, evolving ecosystem Problematic Qualities • (very) eventual consistency • computationally expensive (generally) • Limited query model • Lack of privacy • lack of throughput scalability (generally – 10s txn/sec) • Lacking maturity 22
23. Aside: Storing Data • Blockchains not designed for large data items • Some (Bitcoin) optimised for many small transactions • Large data stored “off chain” • e.g. IPFS and Swarm • Store pointer in blockchain 23
24. Integrating Blockchain Blockchain Application (Dapp) Conventional Application Blockchain (e.g. Ethereum) Immutable Storage (e.g. Swarm, IPFS) object references queries, transactions, smart contract invocations 24
25. Thinking Point: Applying Blockchain • What could you use blockchain for? • At work or to change the world! • What problems would it solve or introduce? Recap • distributed, highly reliable, auditable, immutable database, not requiring trust between participants • smart contracts can embed computation in it • but slow, eventually consistent, limited queries 25
26. Programming Blockchain 26
27. Smart Contracts • The “programming” bit of blockchain technology • Code in the blockchain executed by the runtime • Any participant can add a smart contract (for a fee) • Contract usually mutates the state of the blockchain • add another transaction • Transforms blockchain to a dynamic system • A bit like triggers and stored procedures in RDBMS 27
28. Bitcoin “Script” • Very simple “FORTH-like” virtual machine • Constrained programming model of “locking” and ”unlocking” scripts • Locking script (“scriptPubKey”) defines constraints to execute the transaction • Unlocking script (“scriptSig”) satisfies the constraints to allow execution • Small number of “op codes” for use in scripts. Example Lock: OP_DUP OP_HASH160 <payee pub key hash> OP_EQUAL OP_CHECKSIG Unlock: <payee signature> <payee pub key> 28
29. Bitcoin “Script” <payee signature> <payee pub key> OP_DUP OP_HASH160 <payee pub key hash> OP_EQUAL OP_CHECKSIG Stack based execution: <payee pub key> <payee signature> <payee pub key> <payee pub key> <payee signature> <payee pub key hash> <payee pub key> <payee signature> <payee pub key hash> <payee pub key hash> <payee pub key> <payee signature> <payee pub key> <payee signature> (Push 2 arguments) OP_DUP OP_HASH160 (Push argument) OP_EQUAL (= T) OP_CHECKSIG (= T) 29
30. Ethereum Solidity • Most popular contract language for Ethereum • Turing complete, object-oriented language • Inheritance and user-defined types • Compiles to bytecode that runs on the EVM • Emerging eco-system of frameworks and tools 30
31. Ethereum Solidity contract Coin { // The keyword "public" makes those variables readable from outside. address public minter; mapping (address => uint) public balances; // Events allow light clients to react on changes efficiently. event Sent(address from, address to, uint amount); // This is the constructor whose code is run only when the contract is created. function Coin() { minter = msg.sender; } function mint(address receiver, uint amount) { if (msg.sender != minter) return; balances[receiver] += amount; } function send(address receiver, uint amount) { if (balances[msg.sender] < amount) return; balances[msg.sender] -= amount; balances[receiver] += amount; Sent(msg.sender, receiver, amount); } } Contract Typed state Event for log (and callback) Functions to operate on state 31
32. Solidity & Ethereum Development Ecosystem 32 Geth Eth Pyethapp Clients for JS, .NET and Java Development Tools Mist Wallet MetaMask ether.camp
33. Summary 33
34. Key Concepts 34 Distributed Ledgers • p2p append-only transaction stores Blockchains • cryptographically validated ledgers Smart Contracts • immutable code changing blockchain state
35. What is Blockchain? • A novel type of distributed transaction store • Append-only, auditable, fault tolerant, secure by design • Can be slow and high-latency by accident • Most host “smart contract” code to provide secure computations 35
36. Some Applications 36 Value Transfers: securities clearing, payments Verifiable Records: property registers, supply chain, loyalty points Identity: verifiable digital identity, passports Verifiable Storage: immutable storage of digital assets Decentralised Notary: proof of existence of digital asset Currencies: Bitcoin, Ether, Litecoin, …
37. To Find Out more • Bitcoin – bitcoin.org • Ethereum – ethereum.org • Solidity - solidity.readthedocs.io • Truffle - truffleframework.com • Embark - github.com/iurimatias/embark-framework • Dapp - dapp.readthedocs.io • IPFS – ipfs.io • Swarm - swarm-gateways.net • News – coindesk.com, cryptoinsider.com (and many others) 37
38. Eoin Woods Endava eoin.woods@endava.com @eoinwoodz Thank You 38